Buying a Motor Yacht, A pre-offer checklist
Before making an offer, there are a few things you should check:
Check that the boat is worth the price you are willing to pay. Have a look at reports for boats that have sold and compare asking prices with actual sale prices – Yacht Brokers have access to these resources.
When making comparisons between boats, bear in mind that its value can be increased by factors such as vat included or not, condition, equipment or even just being in a good location. Similarly, the value can decrease, for example, because of the previous factors.
Check whether the yacht has a mortgage or liens – if you are using a yacht broker a yacht broker will do this.
Agree what will be included. Draw up a list of all items , the inventory, with the seller as this will avoid later confusion
Remember that yachts do not have fixed price tags – you can make substantial savings with a little skilled haggling over the price. It is important to get the opening offer right, as this will play a big part in determining the amount you eventually pay. Normally, the opening is offer is about 10% lower than the asking price, and the two parties take this as a starting point for further offers and reductions in asking price until an agreement is reached. Be aware that the asking price can be set high in order to encourage a higher opening offer than would be given with a lower asking price, and you are expected to negotiate.
The negotiation will be affected by various factors, and you will do better if you take these into account:
How many other people are interested in the same yacht. If you are the only one, you are in a strong negotiating position and the seller is likely to accept a lower price. If there are two or more parties making offers, the seller and their broker will be far tougher during negotiations and you may be sensible to offer the asking price.
How quickly the seller needs to sell. If they need to sell quickly, they will be more likely to accept a lower sum than the asking price.
How long the boat has been on the market. If the seller is having difficulty selling the boat , they are more likely to accept a lower price. Check whether the asking price has dropped since it went on the market.
What season it is. Demand for boats are higher in spring and summer so prices will be slightly higher at these times of year.
Your own position will also affect the negotiation. A couple of factors could be to your advantage:
Have you sold your vessel? If not, the seller can be more certain that everything will be completed on time. First time yacht buyers, people who have already sold their own yacht and people who have nothing to sell all have this advantage.
Can you show the seller that you can access enough money to buy the yacht
Remember, if you don’t think the yacht is worth as much as is being asked, you can introduce this into negotiations. For example, if some repair work is needed and you think this should bring the price down, you can try to persuade the seller that the yacht is overpriced.
Here are a few ways you can become a better negotiator:
Make sure you know what you are talking about and show you know it. Let everybody know that you have viewed plenty of boats for sale, and that you understand the yacht market and how much the yacht should be worth. Asking well-informed questions is one way of showing you are not a customer who can be easily conned.
Keep cool and don’t look overly keen. If the seller sees how much you are in love with a boat, they know you will be willing to pay more. Play a bit hard to get, and make sure they know you have seen a lot of boat s. Don’t rush into making an offer; take the time to think about it.
Stay polite, however stressed or angry you feel. Aggression will not get you anywhere. Remember that if a seller has two equal offers, they will probably go for the buyers with whom they are on good terms.
It is best to negotiate in person, not over the phone. This way you can better gauge the other person’s reactions to what you say and respond accordingly.
Yacht Brokers are professional negotiators – be prepared for bargaining
While it is good to play it cool, don’t be overly cautious or evasive, especially if you know the seller has received other offers or needs to sell very quickly. Assess your own and the seller’s positions and act accordingly – if your position is not that strong, worrying over a relatively small sum of money could lose you your dream boat.
Once your offer has been accepted, it must be made formally, in writing, and subject to certain terms and conditions. Ensure that the broker and seller understand the terms of your offer.
Your offer can be “As is Where Is” “Subject to Survey” “Subject to Sea Trial” or “Subject to repair” or “Subject to anything you think is reasonable”. This means that you are not legally bound to proceed until the terms have been satisfactorily completed.
Specify what you want to be included, and what work on the yacht you want to be undertaken before the sale has gone through.
You will normally be expected to put a deposit down 10% is the normal figure.
If you are selling a boat , you have probably also bought it and therefore you have already gained some insight into the world of yacht dealings. Selling a boat is a bit different from buying one, however. This guide is both an introduction for sellers who have not handled purchasers before, and a memory-aid for experienced yacht sellers.
Decide on how you want to sell your boat, whether privately or through a yacht broker.
To sell a boat can take 3 weeks to 3 years – it will depend on the condition, price and accessibility.
- Selling privately will mean preparing adverts for the sailing press and uploading to various sites on the internet. It will take a day or so to prepare and spend some money up front and an ongoing commitment until she is sold. The owner can manage the transfer or employ a yacht broker for just this task.
- Using a yacht broker is easier but more expensive, a good yacht broker will know where to advertise and have access to the best search engines – which are not always available to the individual. You will normally not be responsible for any costs until the boat is sold. A yacht broker will also manage the title transfer.
Estimate the costs involved in the sale
Make your boat more attractive to the buyer by cleaning and doing necessary repairs. It will be cheaper to repair yourself than allow the purchaser to discount the price.
Set yourself a target sales price – but don’t lose a reasonable price for a few percentage points. ( remember that keeping a yacht has its own costs.)
Field the offers and push for higher prices
Don’t be afraid to sleep on an offer overnight
Ensure that any offer and acceptance is in writing.
Use a Yacht Broker or do it yourself – making sure that you know what is required.
On completion ot the title transfer you may wish to register your vessel.
Registration is a process the in the UK is desirable for all boats as it helps to validate the provenance of your vessel.
The yacht broker can register your vessel as an additional service. with the MCA either Small Ships Register or Part One registration which offers the most protection for Leisure Vessel in the UK. Loans and liens are registered against on Part One registration.
Any eligible craft owner can apply to register under Part I of the UK Ship Register.
The advantages of Part One registration is that you can:
- prove title to your boat,
- prove your boat’s nationality use the boat
- as security to obtain a marine mortgage
- obtain ‘Transcripts of Registry’, which show the boat’s previous owners and whether there are any outstanding mortgages.
Good luck with your yacht sale! YachtBrokerUK